“We’re seeing actual population shifts,” William Spransy, CFO of North Carolina-based Eller Capital, tells GlobeSt.com. “I believe demand is still extremely strong in the Carolinas as the pandemic has only accelerated the trend of migration out of the more densely populated areas to lower cost and lower density regions of the Southeast.”
As people move, Spransy thinks capital flows will follow. But that isn’t the only reason he’s optimistic about investment in the Sunbelt.
“The [the COVID migration] is obviously accelerating capital flows,” Spransy says. “In New York City, there are a number of regulatory issues and lower growth prospects.”
Spransy says new groups are coming into the region from the northeast and California. He is fielding calls from people interested in buying properties and even more groups are interested in investing in his deals. “There has been a massive amount of interest in the Sunbelt,” he says. “It’s been a general trend for a while. I feel like it has picked up considerably, and I think that’s going to continue for the foreseeable future from an investment perspective because of the structural demand and the growth prospects here.”
With that increased demand, new development deals are getting done despites construction cost increases. But Spransy is unsure if it’s at the same pace as previous years.
The Sunbelt is a large region and some areas will perform better than others. Spransy sees the Carolinas as a big winner right now.
“We are now starting to see data prove out that there’s a shift of the population job growth to our specific area,” Spransy says.” “So, we’re very excited about that.”
Eller has needed to make some adjustments, including using technology, to welcome these residents during COVID. It has implemented virtual leasing rather than in-person tours to show its apartments.
“We’ve done it a number of different ways too with Zoom and recorded videos on YouTube,” Spransy says. “We have just tried to hit a number of different aspects of that and it seems to be working well.”
Eller closed down its amenity areas where it was recommended by the states that it operates in. When it opened back up, one of its onsite staffers contracted COVID. So, it has made an effort to make sure its onsite staffers are taking the proper precautions to quarantine when needed. “We’ll continue to try and tweak how we manage those issues as we go forward,” Spransy says.
Eller has tried to follow what the best-in-class operators are going on the operational side. “We make sure that there’s clear guidance to our tenants, and we’re trying to set up rules around how we best use our amenity spaces,” Spransy says.